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GBP/USD and EUR/GBP, US data review and ECB meetings

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GBP/USD and EUR/GBP – prices, charts and analysis

  • GBP/USD consolidates recent gains ahead of US data.
  • EUR/GBP looks at the ECB’s policy decision later today.

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Risha Sunak’s support rally in the pound is starting to fade and traders are now turning to fundamentals and technicals to gauge the currency. Sterling outperformed a wide range of currencies after Rishi Sunak took 10th place, and yesterday’s announcement that the mini-budget would be moved from October 31 to November 17 also provided an opportunity British pound elevator. According to Foreign Secretary James Cleverley, both Prime Minister Sunak and Chancellor Hunt wanted to “fix this” and make sure next month’s budget is in line with the government’s priorities.

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GBP/USD traded on either side of 1.1600, partially supportive US dollar weakness While the Fed is expected to raise rates by 75 basis points at its next meeting, traders are now looking for clues that the central bank may begin to ease further, excessive rate hikes. Today’s extended 3Q US GDP survey, released at 13:30 BST, will give the market a clue as to how the recent rate hikes affected the US economy in the third quarter, and any miss to expectations will shift the Fed’s rate hike narrative again.

Cable is now mid-ranged between first-line support just below 1.1500 and resistance at 1.1740. The pair is likely to consolidate within this range over the next few days ahead of the Fed’s (November 2) and Bank of England’s (November 3) monetary policy decisions next month.

For all data releases and market-changing economic events, see DailyFX Calendar.

GBP/USD Daily Price Chart

Chart via TradingView

Retail trader data shows that 49.18% of traders are net long with a short to long ratio of 1.03 to 1. The number of net long traders is 2.33% lower than yesterday and 13.52% lower, than last week, while the number of net-short traders is 4.11% lower than yesterday and 10.99% higher than last week.

We generally take a contrarian view on crowd sentiment, and the fact that traders are not trending suggests that GBP/USD prices may continue to rise. The positioning is less clean than yesterday, but cleaner than last week. The combination of current sentiment and recent changes gives us a further mixed GBP/USD trading bias.




customers pure long.




customers pure short.

Change to

Longing

Shorts

O.I

Every day -1% -2% -2%
Every week -11% 13% 0%

euro/GBP is mixed ahead of today’s ECB policy meeting, where the central bank is expected to raise rates by 75 basis points. EUR/GBP has been pushed lower over the past few days by the pound’s renewed strength, but today’s meeting could help support the single currency, especially if President Christine Lagarde maintains her dovish outlook on the economy. The EUR/GBP daily chart looks mixed and traders may be better off waiting until the end of today’s ECB meeting before entering any trades.

Daily EUR/GBP price chart

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Chart via TradingView

What is your view on British pound – bullish or bearish?? You can let us know via the form at the end of this piece or contact the author via Twitter @nickcawley1.

https://www.dailyfx.com/news/british-pound-latest-gbp-usd-and-eur-gbp-eye-us-data-and-ecb-meeting-20221027.html

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